When I first started managing our marketing budget, I was a bit over my head. To put it mildly.

What software were we actually spending money on? I didn’t know.

What made sense for a monthly ad spend? Not sure.

How much should we budget for the following year? *Searches Google for “what’s a good annual marketing budget”*

Fast forward to the present, I have benefited greatly from working with our finance team to build out a marketing budget that answers all these questions and a budget that fits snugly within the company budget we have at Buffer. What I’m so glad I have now — and what I wished I had then — was a template to follow and some insight into how other marketing teams spent money. I hope that’s what this blog post can provide for you.

In August 2018, our 10-person marketing team spent $93,653 total.

Here’s how we spent it (and the free template you can borrow for your own team).

For more budget insights, we are publishing a series of blog posts about Buffer’s transparent budget. We’d love for you to check it out!

What all is included in a marketing budget?

Marketing budgets can look a lot of different ways. Some include just the costs involved in tools and advertising. Others include a more wholistic view of all marketing expenses: payroll, travel, perks, etc.

One of the metrics that is important to our marketing team is customer acquisition cost (CAC), which is calculated by dividing new customers gained by marketing spend in a given period. To calculate marketing spend, we include everything marketing-related, even remotely so. This means we add up:

Marketing salaries

Marketing team benefits and perks

Marketing software tools and vendors

Freelancers, agencies, and contractors

A percentage of customer support (which we attribute as a significant source of word of mouth acquisition)

In my marketing budget, I’ll track all this except for customer support costs.

Note: Our budgeting rule of thumb: It’s HARD to predict an entire department budget a full year in advance. We give ourselves some grace and flexibility, and we revisit budget things quarterly.

Everything we spent money on in August (and how much we spent)

Teammate Expenses

Payroll

$73,225

This includes salaries, contractors, and misc. payroll

Benefits / Perks

$367

Continuing education and conferences

Travel / Lodging

$9,402

For conferences and retreats

Equipment and Tools

Hardware

$0

Computers and accessories

Software

$3,151

All the tools we pay for

Channels

Advertising

$3,041

Display ads, search, social, and sponsorships

Swag

$168

Buying swag and shipping swag

Freelancers / advisors

$4,300

Consultants

Misc.

$0

Experiment budget

Total

$93,653

Teammate expenses

Payroll: $73,225

Benefits / Perks: $367

Travel / Lodging: $3,152

Equipment and tools

Hardware: $0

Software: $3,151

Channels

Advertising: $3,041

Swag: $168

Freelancers / advisors: $4,300

Misc.: $0

A breakdown of our marketing budget categories

Teammate expenses: Salaried vs. contract teammates

Since we’re a fully remote team where people can work from home (we have no office), our salaries work a bit differently than at other companies. Buffer is legally situated as a U.S. entity, so any teammate with a U.S. residence is paid as a salaried employee. Any teammate who lives and works outside the U.S. is paid as a contractor.

On the marketing team we currently have:

Seven salaried employees

Three contractors (full-time teammates who live outside the U.S.)

At the beginning of the year, we also budget for promotions and new hires. Typically, each teammate will move to the next level in our career framework every one or two years. Hiring varies year-to-year, and plans may even change in the midst of the year. We try to make our best guesses.

Many of the perks come out of the Admin and People team budgets. A handful of them end up on our marketing budget.

Continuing education

Each teammate receives $20 per month ($240 per year) as a learning and development perk. We encourage teammates to invest in themselves by learning a new skill (role-related or otherwise).

So far this year, marketing teammates have tried:

Udemy classes on web design, UI design, and real estate investing

Skillpop classes on illustration, painting, and Adobe Illustrator

Udacity class on web development

PR community membership

CMX membership

Skillshare classes

Enneagram personality tests

Ad Age magazine subscription

Conferences

We also encourage teammates to attend the conferences that interest them. Each team at Buffer chooses to allocate this conference budget differently across its team. On marketing, we divvy up the $4,500 annual budget equally among the nine of us. Each person gets $500 to spend the way they choose.

If a teammate might not use their conference budget, they can give it back to the team for others to use (if other teammates have gone above their $500 max).

Travel and lodging

For the most part at Buffer, teammates end up traveling twice per year: once for our annual company retreat and again for a once-a-year mini-team retreat just for our marketing area (every area of Buffer has their own also).

This category will cover expenses for those trips, and it also includes any travel that’s needed for conferences or events. We also had some expenses pop up here with strategic meetings with partners that require travel or meals or Lyfts.

In August, we spent money on:

Plane tickets to our October mini-retreat in Nashville, Tennessee

AirBnB reservation in Nashville

Hardware: Computer and equipment expenses

For the most part, we have pretty low overhead with computers and equipment. When you join Buffer, you can get reimbursed for a new computer, and then every three years, Buffer will pay for an upgraded model.

In any given year, our marketing team only has two or three teammates who are eligible for this upgrade, so the expense is rather low. The annual cost occurs randomly during the year.

At Buffer, we reimburse the following machine (or its equivalent) for our marketing team:

Advertising and marketing

There could be a whole post written about this category. Budgeting and tracking for ad spend is a huge task — and one we might not be especially suited to advise on. We don’t spend that much, relative to others.

This is the place we put any expenses related to the Buffer-branded items that we purchase and ship out to customers and our audience. We’ve not spent much in this category so far in 2018 but do have some fun ideas and plans for later in the year and early 2019.

In August, we spent:

$118 on Stamps.com and USPS shipping

Outside services: Consultants

This year, we added a budget item for some outside help from agencies, consultants, experts, etc. This has come in handy for us with projects like branding and design, SEO, and content.

Our August expenses had a couple items:

Contracting with a designer for some fresh designs of our Buffer values

Contracting with a writer, Owen Williams, on a vertical video newsletter series

Bonus: Experiments

While not an explicit part of our budget, we did initiate something new on the marketing team this year:

Each teammate gets $50 per month to spend on any experiments they’d like to try.

The goal with this experiment budget is to remove barriers for the team to innovate and try new things. Hopefully, we’ll learn lots and some experiments may become part of our marketing playbook.

So far this year, we’ve tried things like press release distribution, real-time analytics for the blogs, and community design workshops.

Get our marketing budget template

Hopefully the template is pretty self-explanatory. There is an Overview sheet as well as a sheet for Software, Ads, and Line Items. Feel free to edit and manipulate the doc as much as you’d like!

Over to you

What does your marketing budget look like?

Learn anything new from the way that we budget at Buffer?

For any other marketing teams out there who are curious where money goes and how it’s spent, I hope it’s been helpful to share how we do things on our team. We’re a bit unique — no sales, no lead gen, super amazing LTV:CAC ratio. Still, I hope there were some interesting nuggets here.

Fascinating! I enjoyed reading how you folks got everything down to the nitty-gritty. I don’t handle the marketing budget at the startup I’m working at, but after reading this piece, it looks like I gotta start now. It’ll help us plan our strategy and be more mindful about managing our money better. 😃

We get the majority of our Buffer signups from word of mouth, search, and content marketing. Our team works a lot on organic channels and tactics, which aren’t necessarily reflected in the advertising / tools portion of the budget. :)

Oswen Corbel

I’m a bit surprised about the cost of your website, that’s a huge amount of money! I use Duda for all my websites (business and personal) and they offer a lifetime product for only $300, powered by AWS. They also provide contact for dev to improve your website (I’m pretty sure you have yours) to make it faster or compliant with Google. I used WP before, but I honestly think that we should focus on our job and pay the less possible for the website (although it’s the most important part of our digital presence).
Also I’m surprised about the difference between Google ads and FB/Instagram (almost x10 more!).

Hi Kevan
Bonus: Experiments. If you are open for new experiences, I can indicate using the email signature. It may just be from the marketing team, for example. I work at Bybrand (www.bybrand.io/en), where we have the Campaigns feature.
For example, you could advertise the latest blog posts in your email signature.

I think you guys use HelpScout, Bybrand does not yet integrate with it, but it’s easy to upgrade in the signature area. we also use the Help Scout